buying for daughter to hand over later

CallumHenderson

My daughter is getting married. She's a student and her husband to be is unable to work at present. She has a deposit of £10,000 from a grandparent and we are looking for a house around 70,000. My wife and I will buy and hand the house over after a few years when they are both working (she is in 4th year vet school). What kind of mortgage should we get and what should we be aware of. any suggested lenders?

amnblog

If you are buying, and they are living in the property this makes it tricky and many products and lenders will not be suitable.

Options also depend on your ages and method and size of income.

One for a broker.

silvercar

Any reason why she can't buy with you acting as guarantor?

Virgin money do a guarantor mortgage that may fit. Alternatively she may be able to access help to buy.

ritz55

Watch out for inheritense tax and Capital Gains tax when you pass the property on at a later date.


The right way to go about this maybe to purchase with all 3/4 names and then at a later date remove 2 of the names by transfer of equity. This will over come some of these issues. I'm no tax expert so would recommend getting some advice.

System

You have the danger that the people remaining do not pass the mortgage tests so can not get a mortgage without the others

amnblog

silvercar wrote: »

Any reason why she can't buy with you acting as guarantor?

Virgin money do a guarantor mortgage that may fit. Alternatively she may be able to access help to buy.

Lenders allow Guarantors to support lending levels where the main applicant is a little short on affordability.

In this case, the 'main applicants' have no income at all so that is a non starter.

Keep_pedalling

Unless your daughter is doing a 6 year couse at Cambridge she is only a year and a bit away from being qualified, so would it not be better to wait until she is qualified and earning, before buying somewhere especially as she may have to move anywhere in the county for her first job?

You could help out with rent for that short period rather than paying mortgage interest.

You don't say how much cash you propose to put to this, but if your estate is likely to be hit with inheritance tax now would be a good time to gift your daughter some more for her deposit as in addition to your £3000 a year allowance each parent can give up to £5000 as a gift conditional on marrage so between you you can give £16,000 (£22,000 if you did not use last year's allowance) which is immediately removed from your estate.

silvercar

amnblog wrote: »

Lenders allow Guarantors to support lending levels where the main applicant is a little short on affordability.

In this case, the 'main applicants' have no income at all so that is a non starter.

Virgin money guarantor requirements;

Guarantor mortgages
A guarantor application will be considered in the following circumstances:
 The guarantor is at least 25 years and is a blood relative of the customer
 The maximum number of guarantors on the application is two
 Each guarantor has passed the Virgin Money scorecard and policy rules. They must reside and work in the UK
 The guarantor(s) can meet the total commitment including their own mortgage.
Acceptable reasons for a mortgage to proceed on a guarantor basis:
 The property to be mortgaged is for a young professional who is likely to have a quick increase in salary within the next few years and will ultimately be able to support the mortgage in the long term, or;
 The customer will never be in a position to afford the loan but due to relationship the guarantor can establish a long term commitment. e.g. elderly relatives or children, or;
 For business reasons, the self employed customer wants to act as a guarantor for their spouse/partner
If the guarantor is also making a capital contribution to the purchase price, it must be confirmed whether this is a gift or for a share in the property. If a share of the property is required, this is acceptable providing Virgin Money take first legal charge and the guarantor(s) sign a deed of postponement. Affordability is based on the guarantor(s) income only. VM will only take into account income received in GBP / £Sterling as part of the affordability assessment.
Virgin Money recommends prospective guarantors seek independent legal advice prior to acting as a guarantor.
Guarantors are not accepted under the Help to Buy scheme

Dird

I imagine they couldn't be on the mortgage as neither of them has any income.
More importantly, I guess OP doesn't want them on the mortgage anyways as she's in uni marrying a guy who doesn't work (who's paying for the wedding?) so why would they hand over 1/4 of a house to him? At least this way they'll have survived a few years of marriage before signing it over.

CLAPTON

Dird wrote: »

I imagine they couldn't be on the mortgage as neither of them has any income.
More importantly, I guess OP doesn't want them on the mortgage anyways as she's in uni marrying a guy who doesn't work (who's paying for the wedding?) so why would they hand over 1/4 of a house to him? At least this way they'll have survived a few years of marriage before signing it over.

one can be on a mortgage with no income

chappers

Dird wrote: »

I imagine they couldn't be on the mortgage as neither of them has any income.
More importantly, I guess OP doesn't want them on the mortgage anyways as she's in uni marrying a guy who doesn't work (who's paying for the wedding?) so why would they hand over 1/4 of a house to him? At least this way they'll have survived a few years of marriage before signing it over.

Get down off your high horse, the OP said that the guy was unable to work, nothing about not being willing, you have no knowledge of their situation, nor is it any of your business.
He came here asking for advice on a mortgage, not family counselling.